Freehold Districts Attracting Overseas Property Investors in Abu Dhabi

Abu Dhabi’s recent decision to open up the freehold property market has widened the pool of overseas property investors in the region.

Interest has greatly increased for freehold areas such as Al Reef, Al Raha Beach and Masdar City, according to Bayut’s Market report for the first half of 2019.

According to the Abu Dhabi Investment Office, the UAE currently ranks 27th globally for foreign direct investment, and with this recent change to the freehold law, this figure is likely to rise in the coming years.

Freehold communities such as Al Reef and Al Raha Beach have witnessed decreases in prices around the 13 per cent mark, allowing investors to buy property in these mainland areas close to Dubai at affordable price points.

On the other hand, emerging areas like Al Ghadeer are seeing an uptick in prices with 2-bedroom units going up by 6.7 per cent. This can be attributed to the recent off-plan deliveries of larger units in the neighbourhood, leading to greater price fluctuations.

Overseas property investors looking for high rental yields in Abu Dhabi should consider Saadiyat Island for apartments, which offers an excellent average ROI of 8.7 per cent.

However, if looking at villas then the freehold district of Al Reef has the best rental returns for villas at an average of 7.1 per cent, dependant on the property type. Prices for 3-bedroom and 5-bedroom villas in Al Reef have dipped by 5.9 per cent and 7.8 per cent respectively, leading to an increase in ROI.

Haider Ali Khan, the CEO of Bayut, commented: ‘In the first half of 2019, we’ve seen Abu Dhabi take significant steps to cement its position as an attractive option for global investors by opening up its freehold market.

In recent years we have seen Abu Dhabi gain more global exposure by playing host to notable international events including the Specials Olympics and the Formula One. These, I believe, will lead to an increase in expat and foreign interest in investing in Abu Dhabi.